Chipotle Fourth Quarter Comps Suffer Greatly; Could Qdoba Be the One to Eat Chipotle’s Lunch?
January 8, 2016
Chipotle’s (CMG) operating performance has come under tremendous pressure in recent months due to a number of reports linking illness in customers to its restaurants. At first, we thought the situation would be relatively contained to just a few dozen instances of sickened customers, but more concerns have come to light since we last commented on the topic. The media is having a field day. Can a company that prides itself on “Food with Integrity” endure, and why so many different causes of illness, from E. coli to salmonella to the norovirus? Could these events mark the beginning of the end of the burrito-making giant’s growth prospects, or is the bad press just a hiccup of indigestion, soon to be
The Markets Swoon Again
January 7, 2016
The broader US markets (SPY) swooned again January 7 as fears of a slowdown in China (FXI), or worse, a dislocation in Asia’s currency markets, and ongoing concerns about the sustainability of some of the most leveraged “players” in the energy complex took the spotlight again. None of this should be surprising. As we’ve done many a time before with the mortgage REITs, namely American Capital (AGNC) and Annaly (NLY), SeaDrill (SDRL) and the latest with Kinder Morgan (KMI), our members are far ahead of developments. That’s our job – we’re not reporters. We strive to get the right information to our members before it becomes “information,” and using the newsletter portfolios as an indication of our views on capital
Question Answered: The Process Is As Important As the Idea
January 6, 2016
We like to publish excellent questions and the answers to them at times for the benefit of all members. Let’s start with the answer first. A: This is a great question because it hits at the heart of our process. We not only look at the intrinsic valuation of equities, but we also evaluate the market’s conviction in the company’s undervaluation via pricing information, more commonly applied via technical and momentum work. So, in short, we like stocks that have both good value and good momentum indicators, hence our name Valuentum, and we’d only view the top tier of our ranking system 8-10 as ideas for consideration (generally), but only after the ones in the newsletter portfolios (the Best Ideas Newsletter
Seeking to De-risk the Newsletter Portfolios
January 5, 2016
There’s never a good reason to panic in investing, but the 276-point slide in the Dow Jones Industrial Average (DIA) January 4, the worst start to a year since the credit crisis in 2008, reminded us why we hold more than a 30% cash position in both newsletter portfolios at the moment: with a US stock market still near all-time highs, we like having ample capital available to scoop up bargains as stocks inevitably give back some of their gains. The question for us is not whether the broader US stock market will decline from here but whether such a decline will be 10%, 20% or more. After all, the S&P 500 (SPY) has essentially tripled from the March 2009
Dividend Increases/Decreases for the Week Ending January 1
January 4, 2016
Below we provide a list of firms that raised their dividends during the week ending January 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Guaranty Federal Bancshares (GFED): now $0.08 per share quarterly dividend, was $0.05. Firms Lowering Their Dividends This Week Gold Resource (GORO): now $0.0017 per share monthly dividend, was $0.01. Newtek Business (NEWT): now $0.40 per share quarterly dividend, was $0.50. >>Last week’s dividend increases.
Valuentum Presenting at the AAII Chapter in Phoenix
January 2, 2016
Please select the image below to download the slide deck…
Dividend Increases/Decreases for the Week Ending December 25
December 28, 2015
Below we provide a list of firms that raised their dividends during the week ending December 25. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week 8point3 Energy Partners (CAFD): now $0.217 per share quarterly dividend, was $0.2097. FelCor (FCH): now $0.06 per share quarterly dividend, was $0.04. Hanmi Financial (HAFC): now $0.14 per share quarterly dividend, was $0.11. Riverview Bancorp (RVSB): now $0.0175 per share quarterly dividend, was $0.015. Urstadt Biddle Properties (UBA): now $0.26 per share quarterly dividend, was $0.255. Urstadt Biddle Properties (UBP): now $0.23 per share quarterly dividend,
Stock Returns and Financially-Engineered Dividends
December 27, 2015
“Business owners across the world know that their business is not more or less valuable because they paid themselves a higher distribution/dividend this quarter. In fact, the more they pay themselves in distributions/dividends, the less the franchise is worth.” – Brian Nelson, CFA Image Source: Images Money This article seeks to introduce investors to a critical concept often lost on those focused intensely on a company’s dividend payout: dividends are not an additive source to total stock returns above and beyond what a company would generate in capital appreciation. Dividends, instead, deduct from the capital appreciation a stock would otherwise have generated in the event that it did not pay a dividend. From what we can tell, this concept is not well understood. For one, widely-circulated research implies
Getting Excited About Potentially Adding Chipotle
December 24, 2015
Sometimes some of the best franchises never really go on sale, so when they get hit with an exogenous, temporary shock such as what is currently happening with Chipotle (CMG), we pay very close attention. In our view, the market is over-reacting to transient E. coli scares that are helping to mark down the company’s equity to more palatable prices for interested “new money.” Chipotle’s shares still aren’t terribly cheap on the basis of our discounted cash-flow process, but we simply can’t ignore the price fall, which has sent the burrito-making giant’s shares under $500, breaching through our fair value estimate to the downside – remember, the Valuentum process first requires a firm’s equity to bottom, form a base and
Valuentum Applauds ONEOK; More Clarity on “FCF” Still Needed
December 24, 2015
For beginners, Investopedia has a video about free cash flow here : cash flow from operations less all capital expenditures. It would be a huge step forward for executive teams to put this measure on all MLP press releases, in our view. ————————- We’re very happy to announce that ONEOK (OKE/OKS) has released a form of a non-GAAP measure of free cash flow in its 2016 outlook press release. Even though we still would like more clarity around the measure (stand-alone capital spending, etc.), we applaud management’s step forward in disclosing additional information to investors. Valuentum has been calling for the disclosure of non-GAAP free cash flow, as measured by cash flow from operations less all capital spending, in press
